Blizzard lays off 600, vast majority not involved with development

Blizzard Entertainment announced today that it will be letting go of 600 …

Blizzard Entertainment announced today that it's reducing the size of its worldwide workforce by 600 employees, a massive decrease for a company that reported 4,600 employees as recently as 2009. However, approximately 90 percent of the reduction will come from areas not directly related to game development, according to the company, limiting the impact on current projects.

"Constant evaluation of teams and processes is necessary for the long-term health of any business," Blizzard president and CEO Mike Morhaime said in a statement. "Over the last several years, we've grown our organization tremendously and made large investments in our infrastructure in order to better serve our global community.

"However, as Blizzard and the industry have evolved we've also had to make some difficult decisions in order to address the changing needs of our company."

In a post on the company's forums Morhaime also stressed that the company "remain[s] committed to shipping multiple games this year," including Diablo 3, Blizzard DOTA, expansions for Starcraft 2 and World of Warcraft, "as well as other unannounced projects." Morhaime also promised further news on Diablo 3's oft-delayed release date "in the coming weeks."

Vox Games cites an unnamed former Blizzard employee in reporting that the reduction was likely focused on the customer service department, which has reportedly been streamlined thanks to automation of many common support tasks.

The company may also be responding to slowly declining subscriber numbers for its flagship World of Warcraft MMO, which have fallen from a peak of over 12 million subscribers in late 2010 to 10.2 million reported earlier this month.

52 Reader Comments

From what I've seen in MMOs in general almost everybody is just adding a "complete this quest automatically" option and cutting their support staff down to a skeleton crew. It's just a lot cheaper and probably 90% of the calls they get are "can't complete the quest" anyway, so it's just easier to let the players do a little of their own support.

Plus, it's better for the players anyway. When you run into a "oh crap, the guy I was supposed to kill fell through some geometry and now I'm stuck", it's much easier to just hit the "complete quest" button instead of making a support call and waiting 30-60 minutes for the GM to show up, time you can't spend in another quest because it will reset the one you are on.

Vox Games cites an unnamed former Blizzard employee in reporting that the reduction was likely focused on the customer service department, which has reportedly been streamlined thanks to automation of many common support tasks.

Great, now I go from support that doesn't have a good grasp of the English language to a recursive loop.

Plus, it's better for the players anyway. When you run into a "oh crap, the guy I was supposed to kill fell through some geometry and now I'm stuck", it's much easier to just hit the "complete quest" button instead of making a support call and waiting 30-60 minutes for the GM to show up, time you can't spend in another quest because it will reset the one you are on.

WHAT are you talking about ?!! there are nOTHING like that in wow or swtor for example. _nothing_ at all. not either a beginning or hint of that.

Don't feel too bad for these folks. I got laid off out of the blue at Microsoft in a similar fashion years ago. It ended up being the best thing for me in the long run (not even counting that I exercised all my options before the stock tanked). Cost centers are often the ones that get cut out. It's part of the job.

Yeah because Blizzard is struggling so much financially they had to let people go.

There's a difference between letting people go because you're bleeding red ink, and letting people go because it makes good business sense. In fact, doing the latter sometimes prevents the former. If it doesn't make good business sense to keep a person employed, then you let that person go. Keeping them around just because you can currently afford it is just plain stupid.

It's funny how it makes good business since to can 600 people until its YOUR ass getting canned. I mean, its not like this country has an historical high of 5-1 seekers-to-positions across all industries, many employers now are screening people out who do not currently have a job. That's potentially 600 families down 1 job, which can make or break most households in this country. I wish they would post the types of jobs being lost - 'cause I bet that the bulk of people who lost their jobs are the ones least able to shoulder this type of personal disaster.

When I read this I guessed it was Customer Support and Testers.Over time you don't need as many support staff if you have less subscribers or players and the product becomes more mature. Automation does help.

From what I've seen in MMOs in general almost everybody is just adding a "complete this quest automatically" option and cutting their support staff down to a skeleton crew. It's just a lot cheaper and probably 90% of the calls they get are "can't complete the quest" anyway, so it's just easier to let the players do a little of their own support.

Plus, it's better for the players anyway. When you run into a "oh crap, the guy I was supposed to kill fell through some geometry and now I'm stuck", it's much easier to just hit the "complete quest" button instead of making a support call and waiting 30-60 minutes for the GM to show up, time you can't spend in another quest because it will reset the one you are on.

I've never seen a quest reset because I've buggered off half way through. Played SWTOR, DCU, STO and WoW.

The WoW tide has finally crested and begun slowly receding. While Blizzard is certainly pretty far from being in any kind of real financial trouble, this tightening of their staff is indicative of a company that's being more cautious.

I can only hope its so they can concentrate on making better games and have the budget to do so. Even though they have cash now. Its better to shed weight and hopefully give these people some layoff package.

WOW for the best part has definitely hit its user peak. There are a finite number of people in the world. And if you haven't played in 6 years. You probably won't be starting now.

It's funny how it makes good business since to can 600 people until its YOUR ass getting canned. I mean, its not like this country has an historical high of 5-1 seekers-to-positions across all industries, many employers now are screening people out who do not currently have a job. That's potentially 600 families down 1 job, which can make or break most households in this country. I wish they would post the types of jobs being lost - 'cause I bet that the bulk of people who lost their jobs are the ones least able to shoulder this type of personal disaster.

Blizzard has mountains of cash, this is ethically inexcusable!

This doesn't make any "since." Business lay off people all the time, not just in the bad times. Businesses are constantly changing and entering new lines of business or products while closing down others. If they continued to employ people in discontinued product lines, they would have much less capital to invest in new products and expanding the workforce in that direction. We have had some of the occupy crowd outside our AT&T building because AT&T laid off some 700 workers from its land-line business. How many people have landlines anymore? My wife and I both have cell phones. No need for a land line. Even my employer, which is a very large Fortune 50 company, is switching to VOIP. Would you continue to employ people in your widget product if you decided to quit making widgets and switch to cogs?

Unethical? No. Not even close. That pile of cash just means that Blizzard can give these folks a nice severance package. Good business? Absolutely.

It's funny how it makes good business since to can 600 people until its YOUR ass getting canned. I mean, its not like this country has an historical high of 5-1 seekers-to-positions across all industries, many employers now are screening people out who do not currently have a job. That's potentially 600 families down 1 job, which can make or break most households in this country. I wish they would post the types of jobs being lost - 'cause I bet that the bulk of people who lost their jobs are the ones least able to shoulder this type of personal disaster.

Blizzard has mountains of cash, this is ethically inexcusable!

So you're only allowed to terminate employees if you're losing money? Companies stay profitable by making decisions like this. Also, if you bother to READ the article you'll notice the job losses were mostly on the CS side, which is already going to be a department with high turnover at any company, and are usually the lowest paid.

It's funny how it makes good business since to can 600 people until its YOUR ass getting canned. I mean, its not like this country has an historical high of 5-1 seekers-to-positions across all industries, many employers now are screening people out who do not currently have a job. That's potentially 600 families down 1 job, which can make or break most households in this country. I wish they would post the types of jobs being lost - 'cause I bet that the bulk of people who lost their jobs are the ones least able to shoulder this type of personal disaster.

Blizzard has mountains of cash, this is ethically inexcusable!

No it's not. When the job is done, it's done. If there are too many people sitting around on their bum bored, then you probably should let the lower performers go, so they have an opportunity to be creative. They still have "worked at blizzard as a ____" on their resume, and likely for an extended period of time. Layoffs happen all the time. Heck, my current job was temp. The day I was hired, I knew I would be done within a year, full stop. The company had need of my skills for a short period, and now that the project is completed, no longer needs my expertise. Am I mad? Not at all. On the contrary, I'm glad for the experience I did pick up, and the option to try out multiple companies in a short amount of time.

Yeah because Blizzard is struggling so much financially they had to let people go.

The bulk of it is from their WoW support staff. Look, man, if you have 2 million less subscribers, do you honestly still need that many in the support department? Sure, customers would love 5 minute turn around with their, "omg I accidentally sharded my Tier 13 chest, help me pl0x" issues, but c'mon. Blizzard's support is still miles away better than any other in this industry. People who have issues are those that were clearly in the wrong but still want to have it their way. I could think of a million reasons why I should be allowed to punch some customers in their face...

I can only hope its so they can concentrate on making better games and have the budget to do so. Even though they have cash now. Its better to shed weight and hopefully give these people some layoff package.

WOW for the best part has definitely hit its user peak. There are a finite number of people in the world. And if you haven't played in 6 years. You probably won't be starting now.

Almost 7 and a half, now. (believe it or not) The game has been more lucrative than any MMO should ever be, and it's honestly more shocking that they still have such a large user base, as they long ago changed the game significantly from what it was when it built up its user base.

When I was a WoW player, I received better customer support from Blizzard for a freaking game than I get from Comcast now, and Comcast is much bigger, takes more of my money, and is arguably more essential to my life than WoW ever was.

Hope this won't affect their service too much. And yeah, their WoW game has contracted a lot in player size. I am taking this to mean that their WoW xpac isn't going to be coming out yet, because with that usually comes an influx of players, and it would be dumb to lay off a few hundred people only to hire them back two months later.

It's funny how it makes good business since to can 600 people until its YOUR ass getting canned. I mean, its not like this country has an historical high of 5-1 seekers-to-positions across all industries, many employers now are screening people out who do not currently have a job. That's potentially 600 families down 1 job, which can make or break most households in this country. I wish they would post the types of jobs being lost - 'cause I bet that the bulk of people who lost their jobs are the ones least able to shoulder this type of personal disaster.

Blizzard has mountains of cash, this is ethically inexcusable!

Until you've run a similar business and understand all that it entails, you shouldn't be judgemental. Remember, the gaming industry as a whole is volatile and the current climate for MMOs (especially Pay-to-Play models) are not a guarantee. Blizzard has several projects in development: Blizzard DOTA, StarCraft II (Heart of the Swarm & Legacy of the Void), Diablo III, World of Warcraft: Mists of Pandaria, Battle.net (constant upgrades and refinement) and Titan. These all cost money and to retain the best in the industry, you need to shell out. Development cycles are not set in stone so that includes cost.

Don't forget, at the height of WoW, Blizzard had to pay enormous sums of money for new data centers and to upgrade the older ones (I remember recently they sold some of these old server blades and donated proceeds to the St. Jude's Children Medical Center) Because they are independent of Activision with their core operations, they cannot rely on the "war chest" that Kotick is sitting on. Mike Morhaime is right: while it may be an unpopular choice, it is one that the company needs to take in order to survive (and be able to continue to operate independently)

The pandas will bring everyone back and all those people will be re-hired. With panda suits. Or not. Sometimes it makes sense to let people go. Sometimes it doesn't. Unless you were in the room when the decision was made and know all the factors that went into it, you don't know which case this falls under. Speculation is pointless without data. So my point of view would be that this is a thing that happened and which I do not know enough about to form a rational opinion about. Perhaps the author should have done more digging.

It's funny how it makes good business since to can 600 people until its YOUR ass getting canned. I mean, its not like this country has an historical high of 5-1 seekers-to-positions across all industries, many employers now are screening people out who do not currently have a job. That's potentially 600 families down 1 job, which can make or break most households in this country. I wish they would post the types of jobs being lost - 'cause I bet that the bulk of people who lost their jobs are the ones least able to shoulder this type of personal disaster.

Blizzard has mountains of cash, this is ethically inexcusable!

So Blizzard is obligated to pay for 600 people it doesnt need.... Why exactly?

Blizzard is a business, not a charity. As long as it does the right thing by its employees (Redeploy where possible, offer a decent redundancy package, make redundancies voluntary where possible, and offer jobseeking support) then there is no ethical problem here.

In the US, redundancy packages are only for senior execs at companies. Low level employees get nothing. The only employees that will get anything are probably going to be the employees in Cork that are being cut.

As a gamer I'd much rather see Blizzard streamline and improve. If they improve profitability it means other projects might get a go ahead, it's suddenly more financially viable to start a new franchise outside of starcraft/warcraft/diablo, creating better paying jobs (and probably bringing back some of those overseas call centers).

In the US, redundancy packages are only for senior execs at companies. Low level employees get nothing. The only employees that will get anything are probably going to be the employees in Cork that are being cut.

From the forum post:

"I know that you all understand how difficult this type of situation can be for anyone who might be affected, so I want to assure you that we'll be offering each impacted employee a severance package and other benefits."

The corporation-fetishisation that's going on in these comments is pretty telling:

Paraphrased: "Blizzard is entitled to fire people because it makes smart business sense."

Blizzard isn't a living entity with political agency or consciousness. The workers and management are what Blizzard is. Without them, there is no Blizzard.

Cutting 600 workers isn't the doing of the organization. It's management trying to maximize profitability - when market expansion has been exhausted, the only way for capitalists to continue to compete in the free market is by crushing the labour force in order to control costs. Whether it's Blizzard management or Activision management thats doing this 's largely irrelevant. What it comes down to though, is that the product suffers because of this.

Why?

Because what holds true for the individual case does not hold true for the whole. Profitability as a concept fails to take into account that management, indeed all capitalists, are also consumers, and by trying to increase the differential between production and market cost, they end up in a situation where they're, in effect, trying to defraud themselves as a class by removing capital from the system. The end result is a downward spiral, where less capital results in fewer purchases, results in greater cost cutting to maximize profitability, results in less capital in the system, results in fewer purchases, etc.

Looks like nobody picked up on the slip with "Blizzard DOTA" --- Sounds like it's going to be a full product launch rather than just a StarCraft map now.

Been like that for the past year during conference calls. The thinking it will be part of the Starcraft 2 Starter Edition as a F2P with micro-transactions launching their Battle.net Map marketplace. Maybe. Disappointing really. Glad I didn't waste time playing it at BlizzCon since it keeps getting changed. Figure it would be like a $5 map with the launch of Map Marketplace.

It's funny how it makes good business since to can 600 people until its YOUR ass getting canned. I mean, its not like this country has an historical high of 5-1 seekers-to-positions across all industries, many employers now are screening people out who do not currently have a job. That's potentially 600 families down 1 job, which can make or break most households in this country. I wish they would post the types of jobs being lost - 'cause I bet that the bulk of people who lost their jobs are the ones least able to shoulder this type of personal disaster.

Blizzard has mountains of cash, this is ethically inexcusable!

This doesn't make any "since." Business lay off people all the time, not just in the bad times. Businesses are constantly changing and entering new lines of business or products while closing down others. If they continued to employ people in discontinued product lines, they would have much less capital to invest in new products and expanding the workforce in that direction. We have had some of the occupy crowd outside our AT&T building because AT&T laid off some 700 workers from its land-line business. How many people have landlines anymore? My wife and I both have cell phones. No need for a land line. Even my employer, which is a very large Fortune 50 company, is switching to VOIP. Would you continue to employ people in your widget product if you decided to quit making widgets and switch to cogs?

Unethical? No. Not even close. That pile of cash just means that Blizzard can give these folks a nice severance package. Good business? Absolutely.

I know of a Apple Call Center got closed down a couple years back. Where is the outcry there? They have a lot more money than Blizzard, I'm sure they could afford it.

The corporation-fetishisation that's going on in these comments is pretty telling:

Paraphrased: "Blizzard is entitled to fire people because it makes smart business sense."

Blizzard isn't a living entity with political agency or consciousness. The workers and management are what Blizzard is. Without them, there is no Blizzard.

Cutting 600 workers isn't the doing of the organization. It's management trying to maximize profitability - when market expansion has been exhausted, the only way for capitalists to continue to compete in the free market is by crushing the labour force in order to control costs. Whether it's Blizzard management or Activision management thats doing this 's largely irrelevant. What it comes down to though, is that the product suffers because of this.

Why?

Because what holds true for the individual case does not hold true for the whole. Profitability as a concept fails to take into account that management, indeed all capitalists, are also consumers, and by trying to increase the differential between production and market cost, they end up in a situation where they're, in effect, trying to defraud themselves as a class by removing capital from the system. The end result is a downward spiral, where less capital results in fewer purchases, results in greater cost cutting to maximize profitability, results in less capital in the system, results in fewer purchases, etc.

You are being too philosophical about this, and at any rate the law views corporations as people. You are assuming that Blizzard's management is blind to anything but profit. While this many be true in some cases, I sincerely doubt that they look only at the bottom line when making a decision like this. They are likely evaluating the life and support need of the product that these employees worked on versus the capital needed to fun development of new products. Cutting deadweight to invest in future products is good for the company. If I were an investor in Blizzard, I would be happy. You don't grow a company by having a large legacy organization that is just sitting there collecting paychecks.

Yeah because Blizzard is struggling so much financially they had to let people go.

The bulk of it is from their WoW support staff. Look, man, if you have 2 million less subscribers, do you honestly still need that many in the support department? Sure, customers would love 5 minute turn around with their, "omg I accidentally sharded my Tier 13 chest, help me pl0x" issues, but c'mon. Blizzard's support is still miles away better than any other in this industry. People who have issues are those that were clearly in the wrong but still want to have it their way. I could think of a million reasons why I should be allowed to punch some customers in their face...

Telling long paying customers to fuck off about their Tier 13 chest that took months of saving dkp for, leading to them quitting the game is not good business sense.

In the US, redundancy packages are only for senior execs at companies. Low level employees get nothing. The only employees that will get anything are probably going to be the employees in Cork that are being cut.

From the forum post:

"I know that you all understand how difficult this type of situation can be for anyone who might be affected, so I want to assure you that we'll be offering each impacted employee a severance package and other benefits."

If the severance and other benefits were substantial, they would have relased that information to help eliviate the bad press. By not releasing the information, they are trying to not create more bad press.

A lot of times its not what someone says that is important, but rather, what they do not say.

If the severance and other benefits were substantial, they would have relased that information to help eliviate the bad press. By not releasing the information, they are trying to not create more bad press.

A lot of times its not what someone says that is important, but rather, what they do not say.

you never discuss severance with anyone but the person you are giving it to.

It's funny how it makes good business since to can 600 people until its YOUR ass getting canned. I mean, its not like this country has an historical high of 5-1 seekers-to-positions across all industries, many employers now are screening people out who do not currently have a job. That's potentially 600 families down 1 job, which can make or break most households in this country. I wish they would post the types of jobs being lost - 'cause I bet that the bulk of people who lost their jobs are the ones least able to shoulder this type of personal disaster.

Blizzard has mountains of cash, this is ethically inexcusable!

Think of all the people the cotton gin put out of work. If only we had forbidden layoffs, we could all be gainfully employed separating cotton seeds from bolls.

Put your rage someplace it can do more good ... perhaps politics? The fact that Mitt Romney made $21 million in 2011 and only paid a tax rate of 13.9% - less than half what many of us pay on our vastly smaller incomes - that is a matter for true rage. As Warren Buffett said "“There’s class warfare, all right. But it’s my class, the rich class, that’s making war, and we’re winning.”

The corporation-fetishisation that's going on in these comments is pretty telling:

Paraphrased: "Blizzard is entitled to fire people because it makes smart business sense."

Blizzard isn't a living entity with political agency or consciousness. The workers and management are what Blizzard is. Without them, there is no Blizzard.

Cutting 600 workers isn't the doing of the organization. It's management trying to maximize profitability - when market expansion has been exhausted, the only way for capitalists to continue to compete in the free market is by crushing the labour force in order to control costs. Whether it's Blizzard management or Activision management thats doing this 's largely irrelevant. What it comes down to though, is that the product suffers because of this.

Why?

Because what holds true for the individual case does not hold true for the whole. Profitability as a concept fails to take into account that management, indeed all capitalists, are also consumers, and by trying to increase the differential between production and market cost, they end up in a situation where they're, in effect, trying to defraud themselves as a class by removing capital from the system. The end result is a downward spiral, where less capital results in fewer purchases, results in greater cost cutting to maximize profitability, results in less capital in the system, results in fewer purchases, etc.

I'm not a corporate fettishist; and I see what you are saying with the money-go-round argument, but at the end of the day we have to play in the system we have. It is not Blizzards' place to pay people to sit around and do nothing.

By letting these people go it could mean that some use the opportunity to create new businesses and new value into the system, or improve value at another employer and thus add more value into the system.

In the US, redundancy packages are only for senior execs at companies. Low level employees get nothing. The only employees that will get anything are probably going to be the employees in Cork that are being cut.

From the forum post:

"I know that you all understand how difficult this type of situation can be for anyone who might be affected, so I want to assure you that we'll be offering each impacted employee a severance package and other benefits."

If the severance and other benefits were substantial, they would have relased that information to help eliviate the bad press. By not releasing the information, they are trying to not create more bad press.

A lot of times its not what someone says that is important, but rather, what they do not say.

If the norm is zero, then it is clearly more substantial than that.

Really, just accept that you were wrong and move on. Moving the goal posts ("they got nothing" to "they didn't get enough") doesn't do you any favours.

Kyle Orland / Kyle is the Senior Gaming Editor at Ars Technica, specializing in video game hardware and software. He has journalism and computer science degrees from University of Maryland. He is based in Pittsburgh, PA.